Hi guys, it’s me again.
As my previous proposal was rejected, I revised my “Bond Pool” proposal, and here’s the new one:
Background and content:
In order to expand Wing’s business scope, the community proposed to introduce a new product pool on the Ontology version of Wing called Fixed Pool.
The Fixed Pool is a decentralized fixed-rate lending pool where lenders can customize over-collateralized fixed-rate debts by setting the total face value, interest rate, collateral, and debt assets accepted. This pool can help borrowers hedge liquidation risks and diversify the DeFi lending market demand. Through this new product, Wing Finance can reach a higher TVL and a larger market value for WING.
Since the prices of most fungible tokens are easily calculated from exchanges and oracles, most DeFi lending protocols accept them as collateral. However, NFT assets, security tokens, derivative tokens, and LP Tokens are attractive opportunities to collateralize as well. Therefore, it is necessary to have a lending platform where the borrower and the lender reach a consensus on the value of the asset. The Fixed Pool aims to establish an on-chain lending pool where any asset can be collateralized.
Fixed Pool Mechanism
No permission is required to issue debt. Anyone can lend assets to earn fixed interest rates.
The debt issuance is carried out in four steps:
( 1) Asset is escrowed as collateral
( 2) Debt token gets minted
( 3) Debt token is sold
( 4) Issuance completed
The issuer must escrow the assets as collateral before issuing. The collateral can be returned at any time before the debt tokens are minted.
The assets that can be used as collateral are:
- Fungible OEP-4 tokens
- Non-fungible OEP-5 tokens
- Partially-fungible OEP-8 tokens
Debt token minting
- After the debt issuer has pledged their assets, the debt will begin to be minted in the form of a token.
- The debt issuer must select the type of debt to be issued, debt maturity, debt asset type, annualized interest rate, debt token price, number of payment periods, fundraising deadline, effective date, and redemption deadline.
- Debt types are divided into mandatory redemption and negotiable redemption.
The debt issuer can choose to sell the debt tokens in the Fixed Pool or transfer the minted debt tokens on their own.
- When all the debt tokens have been claimed, and the lent tokens are claimable by the debt issuer.
- If a batch of debt is not fully sold, or the ratio of debt collateral value to borrowing value falls below the minimum collateral rate, any user can initiate a refund and liquidation during this period of time. Refund liquidation means that both the issuer and the purchaser can withdraw the tokens they locked.
- The user purchases the debt tokens at their face value on the exchange. The token is shared by the debt issuer and the purchaser, while not being able to be destroyed.
- After the purchase is completed, the assets used to make the purchase are lent to the debt issuer and the purchaser can transfer the debt tokens to anyone for sale on the exchange.
- After the debt issuer has paid all the principal and interest, the issuer can withdraw the collateral.
Debtholders’ exercise of negotiable redeemable debts
For negotiable redeemable debts, debt token holders can burn the debt tokens to obtain collateral during the holder’s exercise period.
- After the end of the debt interest calculation, debt issuers can withdraw their collaterals after repaying interests and principal.
- After the end of the debt interest period, debt token holders can burn debt tokens and withdraw their principal and interest.
Settlement of interest on debt transfer
- Interests which are not claimed will be automatically sent to the original debt token holder if the debt token ownership changes.
- There are two cases that result in defaults: a failure to pay interest on time and a failure to redeem collateral on time.
- For indivisible assets (OEP-5 and OEP-8 assets), after the issuer defaults, debt token holders can initiate liquidation and conduct Dutch auctions.
- For fungible assets (OEP-4 assets), after the issuer defaults, any debt token holder can trigger liquidation.
- OEP-4, OEP-5, and OEP-8 assets cannot be liquidated at the same time.
- This is only a very early beta version trial. Developers should think about how to protect users’ assets. Users should use this beta POC product at their own risks